The Supervisors and Assessor-Recorder will be joined by leaders of the Alliance of Californians for Community Empowerment (ACCE) and California Reinvestment Coalition (CRC) which are publishing the new findings, as well as foreclosure victims from Bayview-Hunter’s Point and Ingleside-Excelsior who will detail their individual accounts of how foreclosures are wreaking havoc on our families and neighborhoods.

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Comments from “Plugged-In” Readers

What’s with the language? “foreclosure victims” — really? “victims”? I’m sorry, but if you buy a house you can’t afford you aren’t getting my sympathy. Take responsibility, have some dignity, learn from your mistake, grow up and be an adult.

What’s wreaking havoc on neighborhoods are the legal games delaying inevitable foreclosures on people living in homes they could never afford which delay the clearing of the market and the sales of those homes at lower prices to people who can afford them.
If the Supes want to protest, they should protest in front of the Federal Building and demand that Fannie and Freddie continue to buy mortgages at the higher amounts required to buy homes in the Bay Area.

@kg Your comment indicates a simplistic viewpoint. You do not take into account:
1. Fraudulent and deceptive practices of major banks.
2. Greatest transfer of wealth from poor to rich in history.
3. Major bailouts to banks with tax dollars, while nothing for underwater home owners.
4. Mistake in buying a house by normal person in market boom vs. major financial operators making much bigger scale mistakes.

I’m immensely bother by people’s approach to avert foreclosure at all cost. This leads to futile government rescue, legal appeal to delay the process, or even a ballot proposal to ban foreclosure in California. Come on, the damage has already been done long before foreclosure. It has been done when they speculate houses in inflated price and taking out loans that they cannot afford. Big financial firms, realtors, buyers, lenders are all accomplices. Delaying foreclosure will not fix the damage. To ban foreclosure you might as well just ban mortgages.
Cohen does the right thing to walk away. She lost her down payment (assuming she has put down any). The lender lost their investment. All players are adult and they should understand the risk that comes with their investment.

kg, it’s a rhetorical tactic whose intent is to make the people who acted irresponsibly look more sympathetic than they really deserve. An attempt to distract the reader and misdirect blame.
Read George Orwell’s famous essay Politics and the English Language.
You can see the same technique at work when some potheads call their hedonistic/recreational drug of choice “medical cannabis” and drug dealers choose to call their customers “patients”.

Please, ryan. This “bank bailouts, the horror” myth is so tiresome. Banks were bailed out because if they had failed they would have crashed the entire economy in a way to make what we have been experiencing seem a picnic. The transfer of wealth is real but has little to do with foreclosures and more to do with things like corporate governance and tax policy. However you try to slice it, adults are responsible for their decisions, even the bad ones. If somebody decides to buy a house without considering that they might lose their job or their incime might decline for some other reason . . . or that real estate markets migut decline in value . . . they have to be responsible for that mistake. It’s really not anyone else’s fault.

“kg, it’s a rhetorical tactic whose intent is to make the people who acted irresponsibly look more sympathetic than they really deserve. An attempt to distract the reader and misdirect blame.”
Agreed. My favorites are the irresponsible jerks who cashed out several hundred thousand in refis during the boom and are now whining about “losing mah home.” To ryan’s point, two wrongs doesn’t make a right — while the banks might not have clean hands, these people were irresponsible.
The media people who interview these people are sure gullible. Not a single person in these articles has ever said, “I spent all the cash-out money on my kid’s education and my cancer treatment.” They all went on vacations and bought BMWs and boats.
And yes, we do need more foreclosures for market clearance. More and faster foreclosures would be a good thing because every foreclosure means that someone gets a house.

Cohen does the right thing to walk away. She lost her down payment (assuming she has put down any). The lender lost their investment. All players are adult and they should understand the risk that comes with their investment.

The 33-year-old Cohen was a community organizer and ran a social-media business before her election in November from District 10. She says she was the victim of a predatory bank loan on the two-bedroom condo she bought with no money down in 2006 at 501 Crescent Way just west of Candlestick Park.

Emphasis added. She had a first mortgage and a second that together was 100% of the property value.
Also, we don’t know that her loan was from a portfolio lender, in which case it was probably sold to Fannie or Freddie and so taxpayers, not nameless “investors” will be taking the loss on the chin. As the socketsite editor says, it was Cohen who was the predator here, not the loan originator, although the originator certainly isn’t blameless since they approved the loan(s).

Oh, and in case it’s not immediately clear, the reason people like Cohen took out 80/20 mortgage loans during the bubble was because it allowed them to avoid paying private mortgage insurance, or the equivalent insurance that the GSEs require. In other words, it was a deliberate move to shift default risk from the borrower onto someone else, most immediately the subordinate loan lender.
That insurance is supposed to be in place specifically to protect the lender when the borrower imposes a higher-than-usual risk. Cohen knew what she was doing, and in the unlikely events she didn’t know, she sure as hell shouldn’t be an elected official.

It’s worth repeating…….
“What’s with the language? “foreclosure victims” — really? “victims”? I’m sorry, but if you buy a house you can’t afford you aren’t getting my sympathy. Take responsibility, have some dignity, learn from your mistake, grow up and be an adult.”
Nothing down lair loans. Did someone twist their arm to sign on the line? Uh I don’t think so. And who picks up the tab for their caviler attitude ???
We do….the 49% of the population paying income taxes…that’s who. While the 51% not paying a dime in income tax complain about being victims…..sick really sick.

There were plenty of responsible people who bought homes but had to pay a lot more for them because prices were driven up by mortgages made available by Wall Street. Most of these people are still in their homes, underwater, and paying for them. Meanwhile, Wall Street made huge profits. I think its pretty fair to say that Wall Street scre.wed a lot of people out of a lot of money and that it is the fault of Wall Street. It wasn’t random chance or market forces. It was a concerted, epic case of fraud. Some current lawsuits are trying to shed light on this.

Wow. Just, wow.
I’m certainly not sympathetic towards the large banking institutions, and feel that the Japanese tradition of ritual suicide would have been an appropriate prerequisite for government bailout funds for those CEOs listed on this flyer. However, this is just so thoroughly over the top:
incendiary language
imaginary statistics
pointless call-to-action
ludicrous “solution”
that I’m absolutely dumbfounded how someone who purports to be a legitimate mayoral candidate would align themselves with it.
Does this kind of stuff really and truly inspire a sizable class of San Francisco voters? Not asking if this has fringe appeal, or appeals to a wide swath of low-income residents, but if there is any discernible electoral logic behind such a stance.

what did Cohen do wrong? she entered a contract with the bank that said she could either (1) keep paying the mortgage until full ownership, or (2) walk away and lose everything she had in the game so far. She took route #2. She didn’t break any contract or violate any agreement.
All the rage here should be directed at the bail-out. Hate the game, not the players that play by the rules, as she did.

I like how the “study” represents that the “foreclosure crisis” has cost SF homeowners $6.9B in “value”.
They have it backwards. It’s the loss of $6.9B in market value that has caused the “foreclosure crisis”, not the other way around.

Would Phil Ting et al like to start the lawsuit against various issuers of mortgage backed securities, for failure to pay transfer tax each time the mortgage was conveyed? On average it takes about 4 transfers for the mortgage to go from originator to trust. The main impetus to the creation of MERS was to avoid paying these transfer taxes on each step of the securitization process.
At the least, where wet ink signatures are being forged post facto to support foreclosure) one could go after the banks for past due transfer taxes (with interest and penalties, of course).

To all you who are beating up on defaulting borrowers: remember there was another party on the other side of the deal, the banks. They were the ones who should have known better; supposedly they’re the professionals at lending. They were cheerfully handing out money right and left, just as caught up in the bubble as the borrowers. They were compelled to play along, even if they knew it was a bubble. As long as the bubble is inflating, there is pressure to get in the game, or else you are leaving easy money on the table. The trick is to get out before it bursts. They did not and now they have all these bum loans on their books and we have all these empty houses on the streets. One way or the other, the banks have to eat these losses, but, hey, they don’t want to. So they don’t want to do any lending because they realize they’re really insolvent, and the entire economy has pretty much hit the pause button until the nation’s real estate is revalued.

It’s the Socketsite neoliberals that are playing rhetorical games. The people facing foreclosure are indeed victims of the housing bubble. Just because someone is not financially savvy or unlucky doesn’t mean they deserve to lose their home.
Look, the people that are most to blame for the bubble are at the top. It’s part of a decades long war by the richest members of our society to take from the rest of us. So they invented rigged games like the Housing Bubble and suckered people into “investing” in the American Dream–then they took the money and ran on to the next scam. These victims, average people that cannot be expected to be as savvy as Socketsite real estate gurus, trusted mortgage brokers and realtors and politicians who all encouraged them to buy that house (often with nothing down and with negative amortization). They thought there were doing the right thing and society encouraged them to do this!
Look, I’m someone that wants to clear the bad mortgages out of the system too. I think lower prices will be better for everyone. But the millions of people that are facing foreclosure are not responsible for creating the Housing Bubble–they were inevitably drawn into the bubble–as intended by the people that laid the trap.
The problem is propaganda. It’s the Teabagging of America. Our discourse is polluted with neoliberal thought–which makes sense since we live in a neo-fascist crony capitalist state. So its no surprise that otherwise intelligent people can’t even properly identify the largest fraud in history and instead focus blame on the victims! This article best describes how neoliberal and conservative propaganda has poisoned our rhetoric (although the article focuses on the Tea Party, it’s applicable to neoliberals as well). The propaganda reverses the causation and protects the truly guilty parties from blame, so that, for instance, many people blame the “government”, when they really mean to blame a corporation.

Just once I’d like to see a perp walk with everybody in the securitization chain. Wouldn’t that be a spectacle. The home buyers surrounded by their mortgage broker and real estate professional, standing next to the warehouse lender, standing next to the guy who packaged up the securities, standing next to the hedge fund guy who was going to short the the CDO and exerted undue influence to make sure only crappy mortgages were in it, standing next to the guy who sold off the securities for the financial firm, standing next the mayor of the small Norwegian city who ultimately purchased the AAA rated tranche which lost all its value. Wouldn’t that be a sight to see.

As a perfect example of Tea Bag style propaganda that turns reality on its head, is this common gem:
“And who picks up the tab for their caviler attitude ???
We do….the 49% of the population paying income taxes…that’s who. While the 51% not paying a dime in income tax complain about being victims…..sick really sick.”
The reality is that the richest 400 Americans pay an average of 18% in taxes. Taxpayers with an adjusted gross income between $500,000 and $1 million paid an effective tax rate of 23.4% in 2008.
The middle classes and working poor pay higher average taxes than the rich! Plus, the distribution of wealth is incredibly lopsided . . . in favor of small number of rich people. It’s downright farcical that some people think that the our current upward redistribution policies are “sick really sick”–not because they are too easy on the rich, but because they are too harsh on the rich.

“Does this kind of stuff really and truly inspire a sizable class of San Francisco voters? Not asking if this has fringe appeal, or appeals to a wide swath of low-income residents, but if there is any discernible electoral logic behind such a stance.”
Yes, Average Joe, it appeals to a huge number of people of all political stripes. The neoliberal media and the politicians have been very effective at controlling the propaganda so it is very difficult for people to make these types of claims. They are shouted down and mocked–like you did by implying that only a fringe group would hold these views. If you watch the mainstream news, etc., your reaction is the typical reaction to traditional left wing, or populist, ideology. But of course you couldn’t be more wrong . . . socialist principles like this are very popular.
Having laws that benefit the majority of people will always be popular. That’s why Social Security, Medicare, and Medicaid are extremely popular. That’s why bailing out the banks is unpopular. That’s why bailing out the people is more popular. Lots of people (of all political stripes) are deeply mistrustful of the “elite” that run our corporations and governments and they actually blame the banks rather than the homebuyers for causing the bubble.
Real Average Joes are not apologists for Big Banks.

“One way or the other, the banks have to eat these losses, but, hey, they don’t want to. So they don’t want to do any lending because they realize they’re really insolvent, and the entire economy has pretty much hit the pause button until the nation’s real estate is revalued.”
Foreclosure is a brilliant way for the banks to eat the losses. That is a side effect of having market-clearing transactions — the banksters eat the loss, and irresponsible people go back to renting and hopefully have trouble getting another loan (except for FHA’s leniency). It’s win-win.

“No word on whether or not Supervisor Cohen plans to detail her account of walking away from the condo she purchased with no money down in 2006, leaving “Wall Street” to absorb her $261,500 loss.”
I wonder if the same complaints are made about rich white male politicians that have gone through a business bankruptcy or reneged on a business deal? Did these people scrutinize the morality of Gavin Newsom’s financial decisions? Is Donald Trump mocked for being an immoral deadbeat unfit for office?
The Supervisor is young and not rich so she is more likely to be a victim of the housing bubble and to have to go through a foreclosure. I wish we had more politicians that went through foreclosures–that would mean we are getting politicians that more resemble average people rather than coming from the rich elite as is currently the case. Plus, in this case, the supervisor made the right financial decision. She had a legal right to walk away. It was a smart move and there was no need to cripple her family’s future for a bank.
In other contexts rich white male politicians are actually complimented for making hard business decisions. Here, the supervisor is being criticized for making a similarly smart financial decision–and not because it was immoral to real people, like her family, but because it was immoral to a bank!

SFHawkguy,
I don’t see where if one loses their house to foreclosure then they are a “victim”. As you accuse the tea party of using rhetoric to confuse the populace, you then go and do the same.
If someone loses their house to foreclosure, often times this is the best possible solution to their situation. Far from being the “victim”, they are benefiting from the foreclosure process by discharging debt. The person who then loses (rightly so) in this situation is the bank, pension fund, or US gevernment that agreed to guarantee the loan.
I agree that the banks acted irresponsibly and have not been properly taken to task, but just because one party may have acted irresponsibly does not automatically make the other party responsible or a victim.

Relax, SFHawkguy. I obviously touched a nerve.
First off, I never in any way offered up a defense of Big Banking. In fact, I think my comment pretty clearly stated that I find the profit-seeking-above-principles behavior they exemplified abhorrent. I value the credit union I do business with for exactly that reason.
And if you think my statement was mocking, you are wayyyy too sensitive. I asked if a sizable population of voters (ie. “fringe” as in “not large” — NOT as in crazy, wacked-out psychopaths) evaluating mayoral candidates looks at a someone who endorses this rally and is inspired.
I find it very troubling that the flyer makes up numbers, identifies everyone affected a “victim”, and then offers a solution — instant mark-to-market of an entire SF real-estate portfolio — without any apparent debate as to the consequences.
My comment has absolutely NOTHING to do with “laws that benefit the majority of people”, and everything to do with the reasons voters choose to support certain candidates. I understand that aggressive socialist principles have appeal to some, and that people are aggrieved by the housing fallout. But does appealing so directly to this raw emotional base make for an effective, viable, general-election candidate?
I personally wouldn’t think so. And, SFHawkguy, if you really liked a candidates’ principles, I would think you’d be inclined to have them “tone it down” enough that they’d have a better shot at winning the election — and thus truly influencing policy.
After all, you managed to belittle me pretty well for even bothering to ask the question. Which doesn’t do a good job of getting me to agree with your stance.

Any asset (house/stocks/bonds/business/gold/cash) gains/loses value over time. That’s just life. If anyone thinks otherwise, they are dumb. Deal with it and make decisions accordingly.
The market could be rigged/manipulated. That doesn’t make it right to be irresponsible or ignorant. Deal with it and get over. The sooner we get it, the better for everyone. It’s easy to blame others….

“Any asset (house/stocks/bonds/business/gold/cash) gains/loses value over time. That’s just life. If anyone thinks otherwise, they are dumb. Deal with it and make decisions accordingly.”
To put a finer point on this, consider that money is used for both consumption and investment. Consider also, that on a global basis even lower income/wealth people in the US have a high level of consumption.
Think about income/wealth inequality (and proposals to redistribute via taxation) in this light. There is a good humanistic rational for redistributing to provide some safety net for consumption, but redistributing investment power from those willing and able to put in work making good investments and honoring commitments to those who are not willing or able has a clearly negative overall impact.
If you assert that people are generally “victims” that do no analysis and are just led along by their mortgage brokers then why is it so terrible that the US system redirects investment capital from these people towards those willing to at least make an effort?
Similarly for most wealthy people consumption as a share of income/wealth is lower then for those lower on the income scale. In this context it is not as shocking that they have a lower effective tax rate. Taxes should fall more heavily on consumption spending then on investment activity.

bravo SFHawkguy. The early comments on this thread are pathetic. Maybe “victim” is too strong of a word, and certainly some people gamed the system, but when 99% of the media, politicians and Fed chairman miss the housing bubble, how is it that you expect the average person toiling away at their jobs to predict the future bubble and it’s ramifications? I’ve read books and blogs about how the bubble came about, and how it blew up. Wall Streeters who were packaging the loans did realize it was a bubble either. Meanwhile, Australia’s bubble only just popped with everyone over there repeating “its different here”. Canada is in the middle of a slow bubble – its different there too. The world is in awe of China’s economic prowess completely missing that they are printing and spending money that would make FDR proud and they have a gigantic bubble brewing.
Meanwhile I bet most of you who didn’t get caught up in the bubble because you didn’t have a job or didn’t realize you could get a liar loan. I know there was phenomonal discourse from the likes of Satchel and SFronzi and they predicted the bubble – and there are “some” smart people who knew to avoid the bubble – but MOST of the world missed it, and they are still missing it in places like China and Canada. Even as Australia’s pops there are still lots of people how “know” it isn’t a bubble there.
So stick your high and mighty up your down and dirty

“or didn’t realize you could get a liar loan.”
Lying on a loan application is a federal crime, a fact which should be clearly stated on the HUD-1.
It doesn’t seem to be very high and mighty to hold people to a standard of not lying on a loan application. Nor is it unreasonable that people have some sort of plan to pay back money that they borrow.

yes but the naysayers are saying that everyone that got caught up in the bubble is stupid and deserves what they got. except plenty of people put 20% down and didn’t lie and could afford their mortgages, and now they’re under water. many also lost their jobs because of the bubble bursting – we’ve got 9.1% unemployment and another 9% underemployed. Are they not victims? Just because you didn’t buy, and you still have a job, does not make you smarter. lots of smart people got caught up. Wall St is full of Harvard and MIT grad students who created this mess and many of them went out and bought homes that are underwater now. Lehman went under, but the smartest guys on the block, Goldman lost tons of money – they just happened to be one of the first to recognize the mess they were in and got out early – but still needed billions in backstop loans because of their losses. So pardon me if it irks me to hear people continue to call people who are going through financial pain stupid. I’m quite sure many of them are smarter than the naysayers.
and yes, i realized i’m being a jerk by calling them jerks. i guess it takes one to know one.

tc i just read your 5:20pm comment. you just proved my point. you are blinded by your ideology and probably speak to people who tell each other the same things over and over again so they “know” that they are right.“why is it so terrible that the US system redirects investment capital from these people towards those willing to at least make an effort?”
So the top 1% who have doubled their share of total income in the past 30 years did that by “putting in a little” effort – and the bottom 40% who live paycheck to paycheck aren’t putting in any effort at all?
You obviously believe the lies that are being packaged as good-for-all-of-us economic and tax policies, which are created by the top 0.1% for the benefit of the top 0.1%. For example, things with scary names like “death taxes”. Studies show that 1.6% of the population gets over $100k in inheritance. yet the current tax free estate is $5 million. So who is coming up with arguments that tax hikes on the wealthy are “redistributing the wealth” or “socialism”? It’s the wealthy and they are conning America.
It is very similar to bubble mentality – and most of the cool aide drinkers stump for the rich aren’t anywhere near that rich or ever going to get there. And yet they believe with all their might that it is unAmerican to not let the uber-rich pad their pockets at the expense of everyone else
You realize that for one group to go from earning roughly 11% of all wage income to 22% (the top 1% over the past 30 years) it has to come from somewhere -right? It came from the bottom 40%. So according to you – “why is it so terrible” to give them even more?
I’d like to let the air out of that thinking bubble because we are officially in plutocracy territory and you’re helping it happen

1. Malia Cohen had a $464,942 first from Wells Fargo and a $116,236 second from Countrywide. The price paid was $581,500 and the sale closed escrow on 12/29/06. Wells Fargo foreclosed with $415,000 owed and re-sold the property in April for $320,000.
2. Regarding Phil Ting, if he really wants to help people stay in their homes he will be more helpful when they attempt to get their assessments reduced. I deal with assessors’ office in all the Bay Area counties and he is absolutely the worst of the lot. His idea of his position is to maximum revenue to the city without regard to fairness to the property taxpayer. Other assessors seem to concern themselves with fairness, as well. In fact, in many cases the property values are reassessed automatically when values decline without the need for many owners to go through the appeals process, which is especially tortuous in SF. I wouldn’t vote for Phil Ting for dog catcher.

These “victims” deserved what they got. Why not prosecute these low lifes and throw them into debtor’s prison?
And what about these low lifes?
Ignoring systemic fraud is the surest way to guaranatee it continues. Read William Black much?

Banks are supposed to have expertise in preserving capital and managing risk. If they cannot discharge those simple duties, then perhaps they should not be in the business of finance. Most of all, they should not be engaging in behavior that puts taxpayer money at risk.
—
Barry Ritholz, TBP

So in late 2005, I was on the fence about buying a 2.1mm condo that was just too much of a stretch but my realtor was pushing me to do it and guaranteed me that I could sell it for roughly double in six years. “There is zero risk– absolutely no downside because SF real estate never goes down . . .” Does this absolve me of any responsibility? I knew it was above my head and that it was probably and significantly more than I could reasonably afford.
Big place, big lifestyle, and the promise of big profits. But the banks should not have lent me the money and there were a whole bunch of other people including my realtor who were complicit in the process all along. (It’s fair game to go after banks because they are evil, but probably not fair game on here to go after realtors and the industry or others or individuals.)
I am not forced to sell now, but it is pretty uncomfortable. If the market rebounds, I would love to get out. I can make payments but in a way, I can’t afford to sell for what I think I’d get now. At that point, better to walk away
So, am I a victim?

I see that SFHawkguy is posting again – this has at least two troublesome implications:
1) he’s developed resistance to the thorazine benzodiazepine cocktails; and
2) taxpayers are apparently subsidizing internet access at the asylum > more money down the government drain;

victim – the travesty the banks have perpetrated against you is nothing compared to what they are doing to me:
Just yesterday I closed on a Broadway mansion no money down with 2 mortgages at $60 mil total. Turns out, I can’t make the first interest payment. Now, the Fraudulent Teabagging Banksters want to foreclose on MY BELOVED HOME.
In light of this outrage, I say:
General Mirkarimi – years ago you served my father in the Desegragation Wars. Now, he begs you to help him in his struggle against the Bankmpire. I regret that I cannot present you with my father’s request in person but my Prius has fallen under attack and I’m afraid my mission to bring it to District 5 has failed. I’ve placed information vital to the survival of the Progressive Cause into the footbed of this Birkestock “Gizeh” thong sandal. My father will know how to retrieve it. You must see this sandal safely delivered to him at Haight and Ashbury. This is our most desperate hour. Help me Obi-Wan Mirkarimi, you’re my only hope;

The problem with california is that it is a “non judicial foreclosure State”.
this makes it is easier for bank malpractice to go unchallenged via the Court system which could cause people to be thrown out of their house potentially w/out proper justice.
conversely, in “judicial foreclosure States” the bank must literally sue the homeowner and provide proof of ownership, including a “Promise” by the borrower to pay it. Thus the homeowner has a fair chance to challenge the bank’s/Lender’s credibility.
In California, the homeowner faces more headwinds in her effort to challenge the bank’s/Lender’s credibility; banks/Lenders know this and quite often get away with it, and in the meantime, reap millions of proceeds that the bank/Lender typically would not reap were it required to prove its ownership of the borrower’s “promise”.
In California and San Francisco, the probability is higher than in judicial foreclosure states that the borrower could indeed be a “victim”.

wrath, I’m nearly in tears over here. Hilarious stuff.
hangemhi, there were plenty of people who saw and avoided the bubble – your generalization that 99% of the population got suckered is absurd. As early as 2005, a lot of well-respected people were publicly speaking out on this topic, from economists (Shiller, Thornberg), asset management types (Hussman, Fleckenstein, the PIMCO credit guy), and countless others. I can’t even remember all their names now.
Bubble articles were in all the major newspapers and magazines (USA Today, Time, etc.). By the beginning of 2007 you had to be living under a rock to not know there was a major problem, or you had to be willfully ignorant. Or, more likely, people realized there was a bubble but figured they were smart enough to get out in time, or that their city/neighborhood was magical and would be immune.
And of course, the realtors did nothing but deny the bubble all along, helping stoke the fire even higher until the entire circus tent fell around them. The name David Lereah ring a bell? What’s he up to lately?

“this makes it is easier for bank malpractice to go unchallenged via the Court system which could cause people to be thrown out of their house potentially w/out proper justice.”
While it’s true that a very small number of people have actually been improperly foreclosed (active duty military, wrong person, actually paid,…) the vast majority of people who are foreclosed on are not actually paying their mortgage. These wrongly foreclosed people can and should sue the bank were the foreclosure not stopped before going to the courthouse steps. Even these error cases, people are just paying what they’d be normally paying. Banks don’t want or need and more REO’s. There are no “millions of proceeds” here.
Conversely on average people are going just shy of two years not paying anything before even seeing a foreclosure. This actually costs the banks, and currently due to bailouts or government backing of some loans, the taxpayer a great deal on money.
Since the wrongful case is a tiny minority of all cases it makes a great deal of sense that non-judicial is the default and a suit is involved only in the few cases that are wrongful.
Additionally, some audits have shown that nearly everyone who got a stated income loan lied on their application. Since in addition to being a federal crime, fraud also puts the loan outside of california’s non-recourse statute. Just losing the house is getting off easy for a great deal of people compared to what could happen if the laws were fully applied.
If your unstated point above is that people should get to keep their house without making payments due to some technicality with the transfer of the note, consider how you feel about the shoe being on the other food. What if it was standard practice for even small errors on a loan application to be considered fraud and hence banks would be allowed to sue for the full amount owed plus damages? Would you support a system of technicalities over justice then?

tell me who decides what a technicality is and what it not a technicality? You, the bank/Lender? or a Judge and possibly Jury? if it is a “technicality”, then why is even a “requirment”? why not simply abolish all “technicalities” and focus on what matters w/out the nag of “technicalities? as you can tell, “tc_sf”, it is a slippery slope you advocate.
tell me, what if the homeowner who was paying and then stopped was actually paying a group that did not have a right to receive payments because it did not own the Promise from the borrower? isn’t that Fraud or stealing?
btw, there were plenty of “liar loans” where the borrower gave the Lender the authority to review the borrowers tax documents direct with the IRS. If the loans were “liar loans”, then why didn’t the Lender do something about it and prosecute after reviewing the tax documents the borrower authorized them to review?
banks and Lenders have had the upper hand versus the borrower because banks are an extension of the Government and receive “bailouts” while leaving the borrower dangling because the borrower is not an extension of the Government and thus does not receive the same privileges.

@kathy,
Good on. I want the banks to be held accountable. They weren’t (thanks, Obama).
The “moral outrage” of those who blame the sheepie is ludicrously one-sided. Whether it was naivety or lying, most of the borrowers are assuming major losses of savings, jobs and houses. If it weren’t so painful I’d say it’s very educational.
As for who was the victim, I say it’s the taxpayer.

“tell me who decides what a technicality is and what it not a technicality? ”
The courts basically. But the issue you raised is whether a judicial trial or an administrative procedure is the default. Given that it is fairly plain that the number of borrowers who lied on a loan application is far greater then then number of wrongful foreclosures it doesn’t seem to me that pushing all cases to trial would really be a net benefit to borrowers. Additionally, adjudicating all cases spreads the judicial budget over many cases giving fewer resources to the small number who truly need it. Even Florida which is currently judicial is considering going to a non-judicial system.
“tell me, what if the homeowner who was paying and then stopped was actually paying a group that did not have a right to receive payments because it did not own the Promise from the borrower? isn’t that Fraud or stealing?”
If the borrower has stopped paying anyone, how have they suffered from the alleged fraud? Banks can argue amongst themselves as to the allocation of prior payments. This doesn’t affect the homeowner’s situation.
“btw, there were plenty of “liar loans” where the borrower gave the Lender the authority to review the borrowers tax documents direct with the IRS. If the loans were “liar loans”, then why didn’t the Lender do something about it and prosecute after reviewing the tax documents the borrower authorized them to review?”
Certainly as in the article linked above some originators also committed fraud and should suffer the consequences. But as a defense the argument, “Why didn’t they catch me sooner?” is unlikely to hold much weight in court (for good reason!).
“Whether it was naivety or lying, most of the borrowers are assuming major losses of savings, jobs and houses”
If someone “bought” a house with zero/little down, lied about their income, can’t make the payments and have been living rent free for two years, what have they actually lost?

^ To put a finer point on this, the “Moral” issue can become a bit of a rat hole, but from a practical point of view, should someone like the above really get to keep the house?
If you can have little/no money down, lie on your loan app, not make the payments and still keep the house, forget about the banks and the “rich”, how does this impact other middle class people who did not do any of the above?
My point about consumption/investment above does not apply only to banks or corporations. Owning/Landlording can be a type of investment that is easily accessible to the middle class and requires little in the form of specialized skills. In addition the the taxpayer in general, I think a portion of the middle class that would otherwise own/landlord gets victimized here as well

@tc_sf
whether it is judicial or administrative, the key is for a neutral authority to consider the facts, including whether a bank/Lender indeed has the authority to take a property irrespective of whether a person is paying or not. If a person has paid a group that did not have the right to receive the payments because it did not have a proper Promise from the borrower, then the bank/Lender group should return those payments to the borrower and allow the borrower make payments to the group she should have been making payments to all along.
You make a lot of blanket assumptions and statements in your missives without any supporting facts or sources, so it is hard to take your opinions seriously.

“You make a lot of blanket assumptions and statements in your missives without any supporting facts or sources, so it is hard to take your opinions seriously.”
Anything in particular that needs support?
Most of the argument above didn’t seem to hold facts in dispute rather were about how to deal with those facts. hangemhi even seemed to be advocating getting a liar loan.
Even in the individual case, as you point out IRS records make the factual determination of the income stated on a loan app fairly simple to determine. Bank records/canceled checks do the same for payments.

kathy > “tell me, what if the homeowner who was paying and then stopped was actually paying a group that did not have a right to receive payments because it did not own the Promise from the borrower? isn’t that Fraud or stealing?”
Exactly my point – I paid all my mortgage payments to my concubine – turns out with 20/20 clarity, you had to pay them to a bank – who could have known that!? It’s not like I read the mortgage documents – I can’t read and am even having this typed up by a guy who normally just sells me falafels.
tc_sf > “But as a defense the argument, “Why didn’t they catch me sooner?” is unlikely to hold much weight in court (for good reason!).’
I disagree. Had they not fallen for them, they could have easily discovered the, as you put it, “lies”. But now that I’ve attached my 60′ plasma (obtained in the same fashion) to the wall and filled my humidor, it is an INCREDIBLE incovenience to ask me to move. The loan should be forgiven in its entirety and all costs of litigation refunded to me. They should also, as amends, extend a new loan to me for other purchases – nonrecourse, zero interest with no maturity – at minimum.

@tc_sf
for example, you make a blanket statement here but how do you know the “number of borrowers who lied is greater than the number of wrongful foreclosures”???? you don’t, which is my point. You also do not know how many “wrongful foreclosures took place” because many were not challenged by a neutral authority, especially those in California and San Francisco which are Non Judicial.
“Given that it is fairly plain that the number of borrowers who lied on a loan application is far greater then then number of wrongful foreclosures”
In addition, you state a borrower is able to live rent free for two years. How do you come up w/two years?? it is just a blanket statement w/no support from any facts or legitimate sources.

What are people’s expectation of what should happen to those getting caught up in the purchases of overvalued SF properties? I’m thinking of the NV trading fish and the viewless, low grade condos getting hawking at $1,200 a square, but I’m sure other examples abound.
Is it buyer beware or should banks be looking out for buyer’s purchase value?
IMO people need to learn not to trust anyone like a real-estate agent, a condo salesman, or a loan broker who is simultaneously giving advice and selling product.
Until that happens, there will be this finger pointing back and forth with fault, but no end to the situation. People are getting fleeced and the best way for that to end is for consumers to be smarter about the game that is being played at their expense.

“People are getting fleeced and the best way for that to end is for consumers to be smarter about the game that is being played at their expense”
Perhaps it is naive of me, but doesn’t this apply to just about every purchase or investment one makes in life? Unless we want to apply some sort of fiduciary role on realtors, loan brokers and banks we will always have this conflict.

You make a lot of blanket assumptions and statements in your missives without any supporting facts or sources, so it is hard to take your opinions seriously.
kathy, you began this sub-thread with an unfounded “blanket” claim that the fundamental problem is that California is a non-recourse state, implicitly arguing that banks collecting on mortgages they don’t own is rampant — and somehow excuses borrower’s poor decisions and even outright fraud. tc_sf has met you at every turn. Is your complaint simply that his responses to your unsupported suggestion are not sufficiently sourced?
How about you respond the the question raised by tc_sf’s posts — even assuming the wrong lender is the one demanding payments, why would/should this excuse a borrower (“owner” seems extreme here) from his/her failure to make payments to anyone? If you’re just going to deny that this ever happens or even meet the question as a hypothetical, then there doesn’t seem much point in this sub-thread continuing. And it’s not tc_sf’s fault.

@shza
“mplicitly arguing that banks collecting on mortgages they don’t own is rampant”
Don’t you read the news? Otherwise you would know that all the states attorney generals are after the banks for not following legal procedure in transferring deeds, setting up MERS to avoid transfer fees, and robo-signing.
The first lawsuit against MERS has just been filed: http://www.businessweek.com/news/2011-09-21/merscorp-bank-of-america-sued-by-dallas-district-attorney.html
That’s not the excuse the borrower, though I’ve yet to see any confirmed data about how many were naive and how many committed fraud. Just to point it out again – this is one-sided moral outrage.

@dwr,
How to “end the situation.” Kathy suggests a neutral authority, usually the courts, state courts (in judicial foreclosure states) and Federal bankruptcy courts. That process will drag on and on, unless some equitable compromise is reached. Where you see “pointing fingers”, I see an effort to diagnose the situation. Plenty of blame to go around. Don’t think there’s much point in delaying foreclosures, but the systemic fraud is extremely serious.
This was not just California, or the US, but a systemic credit & housing bubble that hit most of Europe, if not the world.

@kathy — The Treasury’s OCC looked into the issue of wrongful foreclosures and found the following:
“The federal banking agencies have concluded examinations of foreclosure processing at the 14 largest federally regulated mortgage servicers. The examinations, which we undertook in late 2010 withthe Federal Reserve, the FDIC and the OTS, found critical deficiencies and shortcomings that resulted in violations of state and local foreclosure laws, regulations, or rules. Despite these clear deficiencies, we found that loans subject to foreclosure were, in fact, seriously delinquent, and that servicers had documentation and legal standing to foreclose. In addition, case reviews showed that servicers were in contact with troubled borrowers and had considered loss mitigation alternatives, including loan modifications. That said, the loan samples in our exams identified a small number of foreclosure sales that should not have proceeded because of an intervening event or condition.”http://www.occ.gov/news-issuances/congressional-testimony/2011/pub-test-2011-19-oral.pdf
Testimony for the Fed on stated income loans:
“A recent sample of 100 stated income loans which were compared to IRS records (which is allowed through IRS forms 4506, but hardly done) found that 90% of the income was exaggerated by 5% or more. MORE DISTURBINGLY, ALMOST 60% OF THE STATED AMOUNTS WERE EXAGGERATED BY MORE THAN 50 % . These results suggest that the stated income loans deserves the nickname used by many in the industry, the “liar’s loan.””http://www.federalreserve.gov/secrs/2006/august/20060801/op-1253/op-1253_3_1.pdf
Small sample, but you can google for similar results from other audits.
“The July Mortgage Monitor report released by Lender Processing Services, Inc. shows that foreclosure timelines continue their steady upward trend, as a payment has not been made on the average loan in foreclosure in a record 599 days. Of the nearly 1.9 million loans that are 90 or more days delinquent but not yet in foreclosure, 42 percent have not made a payment in more than a year with an average delinquency of 397 days, also a new record.”http://www.calculatedriskblog.com/2011/08/lps-average-loan-in-foreclosure-is.html
Perhaps 599 days would be better characterized as “slightly more then a year and a half” rather then my choice of “just shy of two years”. But also this was July data and if the trend continues I’d guess that current data has a longer delinquency.
I agree with shza that it seems incumbent on those who propose a large change to the current system to bear the burden of proof.
“That’s not the excuse the borrower, though I’ve yet to see any confirmed data about how many were naive and how many committed fraud. Just to point it out again – this is one-sided moral outrage.”
Assuming that the issues you cite occurred in a particular case, (legal issue with title transfer, MERS, robo-signing) and since you agree that this shouldn’t excuse the borrower, then why should this incite moral outrage? What if the next door neighbor bought the exact same house, at the same time, for the same price and stopped paying at the same time, but had none of the above title issues? Morally what difference is there between the two borrowers? Did MERS have any bearing on the borrowers decision to buy a house or the price to pay for that house?

@tc_sf
you miss my point.
my point is regardless of how many “days a borrower is delinquent” or gets to “live rent free” or the “morality of whether a neighbor is pay her mortgage while another is not”, the foreclosure process in California and other Non Judicial States is dysfunctional. The United States is supposed to be a democratic State, not Communist, thus Individual Rights and Liberty trump the “Group”.
Non Judicial States like California are dysfunctional because Banks/Lenders are able to repossess a woman’s home and do so without following the Law. By following the law, I mean providing all of the necessary documentation required to prove that the Bank/Lender repossessing the home has the right to do so and is required to show that proof to an officer of the Court(whether in Jury context or Administrative).
The threat of and consequences of perjury can have a powerful effect on the Bank/Lender to show that it has crossed all of its “t’s” and dotted all of its “i’s” and if the Bank/Lender has not done so, then it should not be allowed to repossess the woman’s home, and it does not matter whether she is delinquent on her mortgage or not. The letter of the law trumps “morality”, whatever that means and it means different things to different people and groups.
Too often in the Non Judicial States like California, the Bank/Lender has repossessed homes where it did not possess the required documentation to do so, and even if this is a small percantage of total repossessions, it is not just. It should not happen even one time.
It should be no different than the IRS having to prove that you owe it more money than you paid it. Sometimes the IRS is wrong, sometimes the Government is wrong and more times than not, Banks/Lenders are wrong and commit perjurous and fraudulent acts that damage the economy and the justice system itself. At least the IRS performs an Audit as a form of preliminary investigation to actually confirm or deny its position that you owe the IRS more of your property.

@tc_sf,
And you miss my point.
“Morally what difference is there between the two borrowers?”
The outrage throughout this thread is one-sided: directed only at the borrowers. When it’s systemic – mortgage brokers, appraisers, lenders, securitizers, rating agencies, etc. & ignored by the gov – apparently there’s no “morality” involved.
The lenders have a “moral” and practical obligation to make sure they underwrite loans that have a reasonable chance of being paid back. In general, they didn’t because there was huge money to be made in securitization. It was a scam on main street. Or are you going to blame the 2008 credit event that brought down the economy on the little guy? Somehow they just weren’t moral enough?
And, you’re getting 2 posters mixed up.
I think the foreclosure process shouldn’t be delayed. I also think the courts should review and insist the institutions be held accountable to the law. That’s just beginning to happen.

“The United States is supposed to be a democratic State, not Communist, thus Individual Rights and Liberty trump the “Group”.”
What’s communist about having an administrative procedure for foreclosure that can later be challenged in court vs having a process where every single foreclosure has to go through the courts?
Your example with the IRS is incorrect as the IRS can certainly send you a bill without a trial. If you have an issue with them you can go to court. You can even be held in jail without a trial for a certain amount of time, so the ability to send you a foreclosure notice without a trial hardly seems out of line with the rest of the US system.
“The letter of the law trumps “morality”, whatever that means and it means different things to different people and groups.”
The morality comment was for surferD who raised the issue, but you have to see that some sense of justice has to come into play.
As I point out above, the letter of the law makes lying on a loan application a federal crime and excludes the loan from CA’s non-recourse statute. Should everyone with even a small error on their loan app go to prison and receive a judgement for the loan balance?
“It should not happen even one time.”
Do you seriously think that burdening the courts with every single foreclosure case will ensure that not even once a person will be wrongfully foreclosed? You believe courts to have a zero error rate?
@surferD — I saw your reference to “one sided moral outrage” in your post talking about MERS and deeds so I assumed that you were implying that there should be some moral outrage about MERS and deeds. This I do not agree with.
If you are just trying to say that a great deal of people in many parts of the system did wrong during the bubble, then I would agree with you there.
The government is certainly not ignoring crimes by realtors, mortgage brokers, appraisers and some small lenders.
This blog has a good account of charges, convictions and sentences for the above groups: http://mortgagefraudblog.com/
As far as bigger fish any action there will most certainly make the Times and other MSM so you’ll know about it as soon as I.

placing the burden and expense on the Bank/Lender to ultimately prove legitimate title to a property is justice. placing the burden and expense on the borrower to prove the Bank/Lender does not have legitimate title to a property after the Bank/Lender has often times already taken title is unjust and illogical.
Before the IRS takes title to your property it sends you a notice that it is doing an Audit of your return because it may believe you owe more tax than you paid. YOu have the opportunity to prove to the IRS that you paid the tax you owe. You are suggesting that the Bank/Lender should be able to take title to your property before it or you has proven that the Bank/Lender has legitimate title; this is backwards and illogical and leads to more harm than good.

tc_sf,
The contract provides a remedy for those who lied – with or without intent (ie., naivety or fraud). If they can’t pay, the property is foreclosed on. Why the banks wait 2 years to foreclose on someone is a topic for another thread.
If an individual or family reviews their financial situation and finds walking away to be in their best interests, then they have that option under the law. That’s what businesses do when they’ve made bad decisions; that’s what a prominent bank did in SF last year (google that for the details.) Apparently that’s what Cohen did.
The banks do foreclose, eventually, when it’s in their best interests to do so.
So why do you keep raising the moral argument as applied to individuals and not businesses? Is it not morally wrong to engage in widespread risk-taking and fraud as as to affect the whole economy, innocent or not?

@ kathy — Do you have any evidence at all that this is even a real issue? i.e. that people who are actually paying their mortgage are losing their homes without any avenue for judicial recourse?
Note also, that a standard deed of trust contract grants the Trustee an irrevocable power of sale.
@surferD — “So why do you keep raising the moral argument as applied to individuals and not businesses?”
If you’ll search the thread you’ll see that you & SFHawkguy were first to raise the moral issue. For the wider issue, I agree that a lot of wrong was done. For the issue being discussed regarding non-judcial foreclosures, where’s the moral issue regarding the process of foreclosure, MERS or anything on the business side?
If banks were truly taking away the homes of people paying their mortgages I would feel “moral outrage”. But barring individual employee misconduct or incompetence, I don’t even see why they’d want to do so. Banks already have huge REO inventories and relatively large numbers of people not paying their mortgage. Why would they want to hassle someone who actually is paying and end up with yet another house? Even if for some bizarre reason banks wanted to own more empty houses there are plenty of people who are far from current on their mortgages that could be foreclosed on. Why target someone who’s paying?

yes. I do have evidence.
Also, there is a well known Federal Supreme Court case (1892); “the Deed follows the Promissory Note. The Promissory Note is essential; the Deed secondary”.
This is Federal Law – even in California. If the Bank/Lender does not have a properly assigned Promissory Note, then it cannot foreclose regardless of what the Deed says; it has imperfect title. The Promissory Note must document the promise that the borrower made to repay the Bank/Lender; the Deed only evidences the collarteral behind the Note. If the original Noteholder sells the Note to another entity, then the Note must be properly assigned in order for the buyer of the original Note to have perfect title to it.

I’ll concede that there are indeed ‘victims’ of the financial system and that there are people who fell prey to predatory lenders and that some or even many of those folks live in SF’s supervisory district 10. I just don’t think that Supervisor Cohen was one of them.
Look, Malia Cohen strategically defaulted. She admitted in the original SFgate.com post interview that she decided to ‘walk away’ from her contractual obligations simply because her condo was underwater. She put no money down. Of course she was underwater! Which means she knew at the outset that she was going to put other people’s money at risk so that she could speculate on S.F. land appreciation. That was and is wrong and behavior we should not tolerate in a local elected official.
All of which is not to say that Wall St. is blameless. Lending standards were demonstrably driven downwards rapidly during the bubble because demand for mortgages to feed into the securitization pipeline was outstripping supply. Every single book I’ve read on the so-called “financial crisis” makes this point.
But we certainly shouldn’t allow Ms. Cohen to paint herself as a victim here. She knew what she was doing then and she know what she did now. Above, Schaetzer wrote:

Malia Cohen had a $464,942 first from Wells Fargo and a $116,236 second from Countrywide. The price paid was $581,500…Wells Fargo foreclosed with $415,000 owed and re-sold the property in April for $320,000.

The premise that I start with in thinking about situations like this is that every loan has to be repaid by someone. Malia Cohen still owes $261,178 plus the substantial costs of foreclosure. The real ‘victims’ are the people who have to cover that amount because she decided it was too much trouble to repay it.

kathy,
If there are significant numbers of people who have been dutifully paying their mortgage and who have been foreclosed upon, why haven’t we seen this in the media?
I’m no expert on the legal ramifications, but I would think that one would have a VERY good case if they could demonstrate that they had fulfilled their obligations under a Promissory Note and their home was foreclosed upon anyway. I would also think that given the general antipathy towards the banks that the courts might award a sizable judgement.

Here is one example of a bank trying to foreclose on someone when they should have. I remember this one because it was so egregious and because the daily show did a segment on it.
***
Five months ago Bank of America filed foreclosure papers on a Florida couple who didn’t owe anything on their home. Now, those homeowner’s have foreclosed on Bank of America, according to WFMY News.
The homeowner’s, the Nyergers, were forced to take the case to court after Bank of America refused to accept their proof that they’d paid cash for their home.
A Collier County judge immediately accepted the family’s evidence, confirmed the Nyergers’ claims, and told Bank of America to pay all legal fees.
The bank refused, and the family’s attorney did what the bank had tried to do to his clients — he seized their assets. Within an hour of being locked out of his bank, the branch manager handed over a check for the legal fees.
Read more: http://www.businessinsider.com/homeowner-forecloses-on-bank-of-america-branch-2011-6#ixzz1ZBiDO2Uq

“Here is one example of a bank trying to foreclose on someone when they should have. I remember this one because it was so egregious and because the daily show did a segment on it.”
Florida is a judicial foreclosure state. The wronged homeowners here did have a judicial avenue for recourse and won.
I’m not saying that in a nation of 300 million people foreclosure errors never happen. Rather that I don’t see any evidence of people being actually wronged by the non-judcial process in significant numbers whereby switching to a judicial process would be better over all.

@brahma,
That’s exactly what I’m suggesting – that the argument be put in the context of the big picture of widespread fraud and malfeasance.
Morality went out the window in the early aughts – if not before. Remember “no housing bubble in sight” Greenspan? “Take out an adjustable mortgage” Greenspan, disciple of Ayn Rand: Morality is for the weak?
Some borrowers recognized what was going on and took advantage of the situation. Satchel* argued that strategic default is an efficient response to market conditions. Not only did he predict the housing bubble collapse but explained it.
Sappy as it sounds, my personal belief system is that honesty is the best policy.
At this point, what’s to be hoped for is accountability for the institutions and their executives. Borrowers have to take the consequences, if the institutions are held to basic legal and fairness standards.
@Guest666 – you’re mis-reading what Kathy wrote.
*google Satchel for details.

Person A: “Hey – let me borrow $15000″
Person B: “OK. I’m feeling pretty generous. And I think you make enough money to pay me back in the future. Go for it”
….1 yr later…..
A: “Oh you know that $15000? Yeah I can’t pay that back. I spent it. And I lost my job because of the economy. Sorry”
WTF. You guys are saying “A” is the victim? Shit, he did well.
To all those idiots out there calling these borrowers victims of predatory lending practices:
Borrower defaults on a loan that he could not afford –> Bank loses money –> Bank feels the pinch –> Bank needs to be bailed out by government –> Government funds TARP from taxes –> Taxes are paid by everyone
So the transfer of wealth here really is:
Taxpayers –> Whoever bought the foreclosed house for cheap
And the borrower also did pretty well living in a house he should’ve not have been able to afford for however long it lasted.
And nothing wrong with what that Supe did. She gamed the system. Well played, ma’am. Just don’t fucking go around talking about how you were victimized when you screwed over the bank and therefore taxpayers.

CR just posted some info which can provide ballpark context for the scope of mortgage fraud:
“The Financial Crimes Enforcement Network (FinCEN) today reported in its Second Quarter 2011 Analysis of mortgage loan fraud suspicious activity reports (MLF SARs) that financial institutions filed 29,558 MLF SARs in the second quarter of 2011 up from 15,727 MLF SARs reported in the same quarter of 2010.
[…]
The most common mortgage loan fraud suspicious activity was the misrepresentation of income, occupancy, debts, or assets (about 30%). Some of the more current frauds are related to debt elimination and short sale fraud (unfortunately attempted short sale fraud is very common).
FinCEN has some Mortgage Fraud SAR Datasets breaking down the data by state, MSA and county. California was #1 in Q2 (Nevada or Florida have usually been #1). San Jose-Sunnyvale-Santa Clara, CA was the #1 MSA.
”http://www.calculatedriskblog.com/2011/09/treasury-mortgage-loan-fraud-suspicious.html
If you believe that past prices were entirely justified by tech money it is Interesting to note that San Jose MSA was #1 for fraud per capita, San Francisco was #7 this quarter, #2 last quarter .